The demand curve is a graphical representation, plotted against the price and quantity demanded of a commodity. Using this method, economists can study and analyze the supply and demand of a commodity in the market. Moreover, this shows the relationship between price and demand for a commodity, showing either movement or shift on the demand curve.
Movement vs Shift in Demand Curve
The main difference between Movement and Shift in Demand Curve is that in the case of Movement, the quantity demanded and price are interdependent factors, such that when prices change, so does the demand for that commodity; which results in the demand curve being moved. Whereas, the price remains constant even though demand changes with the effect of various factors in the case of shift.
Meanwhile, in the Demand curve, the movement is responsible when there is a slight or huge change in price and quantity demand for a specific commodity in the market. The curve usually extends or contracts, depending upon its change in price as well as quantity demand. So with this, one gets to know the insights of one’s products and their demands among customers.
While, on the other hand, when the quantity demanded changes due to factors, but the price remains the same, we describe this type of graphical representation as a shift in the demand curve. This shift could be for various reasons, including the change in the number of customers, their tastes, and their incomes.
Comparison Table Between Movement and Shift in Demand Curve
| Parameters of Comparison | Movement | Shift in Demand Curve |
| Meaning | Movement in the demand curve indicates variation in price as well as commodity’s demanded quantity. | Shifts appear when the changes in demands occur, alongside other factors; keeping price constant. |
| Price and Demand | A change in price affects the quantity demanded of a product, too. | Price remains constant, whereas quantity demanded depends on various factors. |
| Factors | Price and quantity demanded play an influential role in creating movement on the demand curve. | Change in demand caused by Income, preferences, prices of goods, expectations in the future, population. |
| Curve | Upward movement- price increase; Downward movement- price decrease. | As demand increases, it is a rightward shift; As demand decreases, it is a leftward shift. |
| Effect on the supply curve | Expansion and contraction of the supply curve | Increase and decrease of the supply curve |
What is Movement?
In demand curves, usually, there would be a movement drawn on the graph, illustrating a move in the price (y-axis) and quantity demand (x-axis) of a commodity. Further, the movement embodies the consistent relationship of a commodity among customers. In the demand-price graph, small variations in price cause the demand curve to move, and eventually, result in changes in quantity demanded.
In the abstract, one can gain insight into one’s products and their demands as well as how the products are perceived among customers. The prices and quantities demanded of a particular commodity are the two primary factors that influence the movement of the demand curve. As per the demand curve, where there is an upward movement, that indicates an increase in prices. While a downward movement represents a decrease in the price of that commodity.
According to changes in both quantity and price, the curve usually extends or contracts. To put it in simple words, the extension of the movement in the demand curve is due to the growth in commodity demands and a plunge in price. On the contrary, the contraction of the movement in the demand curve is caused by a drop in demand and a rise in the price.
What is Shift in Demand Curve?
As we know, demand curves are plotted about the expenditure and abundance of a product. That being so, the demand curve exhibits a shift when the quantity demanded changes due to factors but the price remains the same. Various commercial reasons might account for this alteration in the demand schedule of an entity in the market, such as the change in the number of customers, their incomes, taste & preferences, pricing of related products, size of the population, and expectations for the future. Therefore, a shift in demand curves entirely depends on the above factors, whereas the price of the commodity remains essentially unchanged.
On the whole, a shift is an important parameter in demand curves, because it changes the commodity’s amount purchased by people at every price point. Furthermore, the shift in demand curve conveys two meanings, like the rightward shift indicates favorable factors with an increase in demand eventually rising in price and commodity. While, the leftward shift indicates unfavorable factors leading to a decrease in demand, tending to a drop in profits and commodities.
For instance, the shift in the demand curve for cold drinks during summertime is towards the right, such that the demand for cold drinks increases in summers. Whereas, it is towards the left, indicating a decline in the demand for cold drinks during summertime.
Main Differences Between Movement and Shift in Demand Curve
- A demand curve’s movement demonstrates a change in price plus the quantity requested for a commodity. On the other hand, a shift in the demand curve occurs when the price remains constant but demand varies due to some factors of production.
- Price and quantity demanded are inter-dependable factors in terms of movement on the demand curve. Whereas, even if demand changes according to various factors and shifts the demand curve, the price remains the same.
- In the case of movement on the demand curve, the supply curve remains the same. But for the shift on the demand curve, the supply curve shifts either right or left side.
- Only one demand curve is taken into account to see the movement in the demand curve, where upward movement shows a positive rise in price and demand and vice versa for downward movement. On the contrary, there are two demand curves, where rightward shift indicates an increase in demand due to favorable factors and leftward shift indicates a decrease in demand because of unfavorable factors affecting.
- Movement in the demand curve shows expansion & contraction of supply, but the demand curve’s shift exhibits either a gain or reduction of the supply schedule.
Conclusion
This movement of the curve occurs when quantity is demanded along with price change, resulting in a change in the direction of demand. Whereby other factors such as consumers’ income and preferences remain constant alongside variation in the prices of other goods. As a result, either upward or downwards movement appears on the demand curve.
While a demand curve’s shift happens, when factors affect demand for a product, keeping prices unchangeable. As a result, it shifts the demand curve in a certain orientation. A price change, along with one or more other factors, will affect the quantity demanded. Depending on the factors that influence it, the demand curve could shift to the left or the right.
References
- https://link.springer.com/chapter/10.1007/978-94-015-7715-1_2
- https://www.jstor.org/stable/1905412